Grubb v Grubb, (Tenn.Ct.App., filed June 9, 2017).
Under what circumstances can a prenuptial agreement be invalidated?
This appeal arises from a divorce in Roane County, Tennessee. Wife filed for divorce against husband in the Chancery Court for Roane County. The trial was bifurcated. The validity of the parties’ antenuptial agreement was tried first. The Trial Court found that the provision in the Agreement purporting to cap Wife’s alimony was unenforceable but otherwise upheld the Agreement. Husband appealed raising numerous issues. Wife raised additional issues of her own. The Court of Appeals held that Husband failed to carry his burden as to the validity of the Antenuptial Agreement.
Husband and Wife married in 2002. There was a significant gap in the parties’ ages as well as their educational, employment, and business backgrounds. Wife was born in 1982. Husband is 22 years older than Wife. Wife earned her G.E.D. in 2000. Husband graduated from college in 1985. Husband worked in his rent-to-own business and sold furniture, electronics and appliances. Husband met Wife around 2000 when Husband took his clothes to the dry cleaners where Wife worked. Husband and Wife began a relationship. Wife soon thereafter moved in with Husband and stopped working at the dry cleaners. Husband provided for them both, and Wife soon became financially dependent on Husband. Husband proposed to Wife in 2001. Husband, who had been
married once before, desired an antenuptial agreement with Wife. In August 2002, Husband took Wife to his family lawyer to sign the Agreement. This was two days before the couple was to go on vacation and be married. The accounts of this meeting are in contention. Wife states that she did not fully understand what she was signing. Wife was informed that the Attorney, Chris Trew, was not her attorney and that she could get independent legal advice if she wished to do so, something she never did. Wife signed the Agreement, and the couple shortly thereafter left on their vacation as planned and got married.
Prenuptial contracts are favored by public policy in Tennessee. Prenuptial contracts benefit the parties by defining their
marital rights in property which tends to be among the most frequent causes of family
36-3-501. Enforcement of antenuptial agreements. – Notwithstanding
any other law to the contrary, except as provided in § 36-3-502, any
antenuptial or prenuptial agreement entered into by spouses concerning
property owned by either spouse before the marriage that is the subject of
such agreement shall be binding upon any court having jurisdiction over
such spouses and/or such agreement if such agreement is determined, in the
discretion of such court, to have been entered into by such spouses freely,
knowledgeably and in good faith and without exertion of duress or undue
influence upon either spouse. The terms of such agreement shall be
enforceable by all remedies available for enforcement of contract terms.
Tenn. Code Ann. § 36-3-501 (2014).
Regarding the burden of proof and what constitutes sufficient disclosure in
antenuptial agreement cases, our Supreme Court has instructed:
As we interpret the knowledge element of the statute, the spouse seeking to
enforce an antenuptial agreement must prove, by a preponderance of the
evidence, either that a full and fair disclosure of the nature, extent, and
value of his or her holdings was provided to the spouse seeking to avoid the
agreement, or that disclosure was unnecessary because the spouse seeking
to avoid the agreement had independent knowledge of the full nature,
extent, and value of the proponent spouse’s holdings.
* * *
The extent of what constitutes “full and fair” disclosure varies from
case to case depending upon a number of factors, including the relative
sophistication of the parties, the apparent fairness or unfairness of the
substantive terms of the agreement, and any other circumstance unique to
the litigants and their specific situation.
In the absence of full and fair disclosure, an antenuptial agreement
will still be enforced if the spouse seeking to avoid the agreement had
independent knowledge of the full nature, extent, and value of the other
spouse’s property and holdings. Of course, the particular facts and
circumstances of each case govern, to a great degree, the determination of
knowledge. Some factors relevant to the assessment include, but are not
limited to, the parties’ respective sophistication and experience in business
affairs, the duration of the relationship prior to the execution of the
agreement, the time of the signing of the agreement in relation to the time
of the wedding, and the parties’ representation by, or opportunity to consult
with, independent counsel.
As the proponent of the Agreement, Husband had the burden to prove, by a preponderance of the evidence, that the Agreement was entered into by Wife freely, knowledgably, and in good faith. While antenuptial agreements are favored by public policy, Tennessee courts do not simply rubberstamp their validity. The circumstances surrounding the signing of the agreement must be transparent and attended by sufficient disclosure of property interests. Other important considerations are the timing of signing an antenuptial agreement in relation to the wedding date, the relative sophistication of the parties, and the opportunity of parties to secure independent counsel in order to review an antenuptial agreement.
The Court of Appeals invalidated the agreement, focusing on the timing of the execution (Wife rushed into signing the agreement two days before vacation and wedding), Wife’s lack of legal representation, and the gap in parties’ education and sophistication and experience in business affairs.